MEMORANDUM AND ORDER
This mаtter is before the court on the defendants’ several motions to dismiss or for summary judgment. Plaintiff, an unsuccessful bidder on several state contracts, alleges that defendant Roach unlawfully awarded the contracts to defendant Columbia Laundry Machinery Company [“Columbia”] because of Roach’s friendship *108 with defendant Maxwell, who is a director, officer, and shareholder of Columbia. Defendants now move for judgment on plaintiffs claims.
The following facts are unсontroverted for purposes of the present motions. Several times during the years 1983-85, the State of Kansas utilized the bidding process to purchase laundry equipment for use at various state facilities. Pursuant to Kansas statute, K.S.A. 75-3739, the state official in charge of handling such bids is the director of purchases, in this case defendant Roach. On at least three occasions during this time period plaintiff submitted a lower bid than defendant Columbia, but in each of those instances Columbia was awarded the contract. Although plaintiff alleges numerous illegalities and asserts that Columbia did not always submit conforming bids, the principal allegation is that Roach improperly awarded the contracts based on his relationship with defendant Maxwell. Plaintiff instituted the present lawsuit on February 10, 1986, stating causes of action for violation of the civil Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968, violation of plaintiffs due process and freedom of association rights pursuant to the United States Constitution and 42 U.S.C. § 1983, and a pendent state law cause of action for fraud.
A moving party is entitled to summary judgment only when the evidence indicates that no genuine issue of material fact exists. Fed.R.Civ.P. 56(c);
Maughan v. SW Servicing, Inc.,
In considering a motion to dismiss, the factual allegations of the complaint must be taken as true and all reasonable inferences must be indulged in favor of the plaintiff.
Mitchell v. King,
The court will first address defendants’ challenge to plaintiff’s section 1983 claim. Plaintiff alleges that the defendants’ surreptitious conduct in performance of the above-mentioned bidding process constitutеd a taking of plaintiff’s property without due process of law, in violation of the fourteenth amendment. Plaintiff also argues that defendants’ conduct constitutes a punishment or penalty for plaintiff’s not being within defendant Roach’s favored group of friends, in violation of the first amendment freedom of association. Plaintiff claims that the wrongful acts were done under color of state law in violation of 42 U.S.C. § 1983. Defendants deny that plaintiff had any constitutionally prоtected property *109 interest, or that any cognizable associational rights were violated.
Under 42 U.S.C. § 1983, the plaintiff must establish that he was denied a federal, constitutional, or statutory right under color of state law, custom, or usage.
Wright v. No Skiter Inc.,
To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.
Id.
(quoting
Board of Regents v. Roth,
The question of whether a disappointed low bidder for a state contract has a property interest in being awarded the contract has been addressed by few courts. Chief Judge O’Connor of the District of Kansas has recently spoken on this issue. In
Gilbert Central Corp. v. Kemp,
In a case just decided, the Tenth Circuit addressed this issue extensively. In
Curtis Ambulance of Florida, Inc. v. Board of County Commissioners,
When state law provides that a given benefit which constitutes “property” or “liberty” ... shall be conferred upon those who take the requisite procedural steps and meet the requisite substantive standards, the right of an individual who has taken the requisite procedural steps to have his claim of entitlement to the benefit decided, not arbitrarily, but in accordance with state law, itself constitutes an interest protected by the due process clause.
Id .
at 1377 (quoting
Hixon v. Durbin,
“[T]he majority rule bar[s] an unsuccessful bidder from bringing an action against public contracting officials.”
Sowell’s Meats and Services, Inc. v. McSwain,
[A] constitutional violation may not be made out merely by showing a breach оf the provisions governing the award of the contract. As stated in Three Rivers:
Recognition of the fact that the violation of the law is not, ipso facto, a deprivation of due process to all persons affected thereby is fundamental to an understanding of procedural due process. The due process clause is a narrow, personalized guarantee which only protects against the deprivation of one’s own liberty and property; it is not a catchall provision designed to promote the interest of society generally in the obedience of its laws.
The Tenth Circuit in
Curtis Ambulance
discussed at length a case involving such a statute. In
Three Rivers Cablevision v. City of Pittsburgh,
[I]n the circumstances of this case a property interest of relatively narrow dimension exists. Simply stated, that interest was the right of the lowest responsible bidder in full compliance with the specificatiоns to be awarded the contract once the city in fact decided to make an award. The due process to which one possessing the protected interest was entitled was the non-arbitrary exercise by the city of its discretion in making the award. And it follows that a deprivation of the substantive benefit (the protected property interest) without the process due is an actionable wrong.
Id. at 1131. The court agrees with this statement of law.
The court finds that K.S.A. 75-3740, coupled with the
Sutter Brothers
opinion, sufficiently establish a legitimate
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claim of entitlement for a bidder to be awarded а state contract if he submits the lowest responsible bid. This claim of entitlement qualifies as a property interest under the due process clause of the fourteenth amendment. The Tenth Circuit’s opinions in
Wright
and
Curtis Ambulance (see
The parties have also briefed the issue of agency,
i.e.,
whether the defendants were agents of one another, as alleged by the plaintiff. This issue is unnecessary to plaintiff’s cause of action, because the United States Supreme Court hаs stated that “[pjrivate persons, jointly engaged with state officials in the challenged action, are acting ‘under color’ of law for purposes of § 1983 actions.”
Dennis v. Sparks,
In addition to the due process claim, plaintiff bases its section 1983 cause of action on an alleged viоlation of the first amendment right of freedom of association. The court agrees with defendants that this claim has no merit. Plaintiff has not demonstrated that it engaged in any form of association protected by the constitution.
See Roberts v. United States Jaycees,
Next are defendants’ motions for summary judgment on plaintiff’s RICO cause of action. Plaintiff has extensively briefed the issue of whether a RICO claim requires only one or more than one “scheme” to fulfill the “pattern of racketeering activity” requirement. Its arguments on this point are academic, beсause the court finds that the complaint and the existing evidence suggest multiple schemes to defraud, at least for purposes of surviving summary judgment. If plaintiff fails to state a RICO cause of action, it is on grounds other than the pattern requirement. Plaintiff also has shown sufficient injury to its business, a requirement in 18 U.S.C. § 1964(c), as the previous discussion of property interests demonstrates. If plaintiff’s allegations are true, plaintiff has shown that it was illegally denied certain state contracts and has suffered lost profits as a result. Whether plaintiff would *112 have received the state contract absent any alleged favoritism on the part of defendant Roach is an issue of fact not adjudicable at this stage of the case.
The court agrees with defendants that plaintiff’s complaint fails to plead the underlying basis for the RICO claim with the necessary specificity and particularity. Even if the court adopts plaintiff’s view of the liberality of Federal Rule of Civil Procedure 9(b) and its fraud-pleading requirements, plaintiff’s mere unsubstantiated claims of wire and mail fraud fall far short of apprising defendants of sufficient facts upon which to defend this lawsuit. Moreover, plaintiff fails to properly identify the enterprise through which the pattern of racketeering activity was conducted. Although defendants make numerous additional valid objections to plaintiff’s RICO claim, the court believes that granting plaintiff’s request to amend its complaint is preferable to dismissal. Therefore, the court will allow plaintiff to file an amended complaint within ten days of the date of this order. In its amended complaint, plaintiff must: (1) plead with sufficient particularity the fraud or other wrongful acts that establish racketeering activity; (2) specify the time, date and content, or similar factual background, of any mail and wire fraud acts that constitute racketeering activity; and (3) identify, demonstrate the existence of, and define the scope of an enterprise through which the racketeering activity was conducted, and indicate the role of each particular defendant (treating them separately with specific allegations as to each one) in the conduct of the enterprise. Upon plaintiff’s filing of its amended complaint, defendants may include with their answers a request to renew their motions to dismiss or for summary judgment, and may also file suрplementary briefs to address the contents of the amended complaint. Therefore, for purposes of the present Memorandum and Order, defendants’ motions for summary judgment or to dismiss will be denied as they relate to the three particular issues enumerated above.
Defendants Maxwell and Columbia also argue that plaintiff has failed to adequately plead conspiracy and a nexus between defendants and the alleged enterprise through which racketeering activity was conducted. The latter objection should be addressed by plaintiff’s amended complaint. Also, because the complaint reveals no allegations of conspiracy, the court will dismiss the former argument as moot.
Defendant Roach claims that he is not a person within the meaning of 18 U.S.C. § 1962(c), and therefore cannot be sued for a RICO violation. “Person” is defined as “any individual or entity capable of holding a legal or beneficial interest in property.” 18 U.S.C. § 1961(3) (1982). Plaintiff offers cases refuting Roach’s argument,
see, e.g., United States v. Frumento,
Defendant Roach extends his argument to the more general question as to whether a state agency can be the “enterprise” through which racketeering activity is conducted. Although plaintiff alleges in its brief that the enterprise in the present case is an association-in-fact of all three defendants, its complaint is less than informative as to exactly what “enterprise” existed. The court’s earlier directive concerning amendment of plaintiff’s complaint should help make the matter a little less ambiguous as to whether the plaintiff is alleging the state purchasing director’s office as the enterprise, or whether the enterprise is merely an informal association of defendants operating in fact as an enterprise. It
*113
will suffice here to note that the definition of enterprise “unambiguously encompass[es] governmental units.”
United States v. Angelilli,
Defendant Roach also contends that because plaintiff is entitled to neither equitable nor legal relief, its RICO claim shоuld be dismissed. The
Sutter Brothers
court demonstrated the equitable relief to which plaintiff is entitled,
see
Defendant Roach further argues that plaintiff lacks standing to address alleged RICO violations against persons other than the plaintiff. Certainly, the plaintiff may not recover damages for these other violations, but it is permitted to raise their existence in order to establish the “pattern” requirement. Plaintiff is the real party in interest in that it alleges wrongful conduct peculiarly directed at it.
Finally, defendants move to dismiss plaintiff’s common law fraud cause of action. Because the court has retained the section 1983 claim, defendants’ grounds to dismiss this claim based on their desired dismissal of the federal causes of action are without merit. However, because plaintiff has been directed to plead its fraud claims with more particularity, defendants’ motions as they relate to the substantive requirements of pleading fraud may be renewed in the same manner as that outlined above.
Defendant Roach also argues that the two-year statute of limitations for fraud, K.S.A. 60-513(a)(3), has run on any fraud cause of action arising before February 10, 1984. Plaintiff claims that the fraud could not reasonably have been discovered prior to January 1986, when plaintiff learned of fraud in connection with one of the bids. Defendant Roach contends that Kansas statutory law requires all bid records and documents to be open for public inspection. See K.S.A. 45-215 to -225 (1986) (Kansas Open Records Act). Therefore, defendant argues that the claims of fraud should have accrued immеdiately upon each bid being announced. The court finds that any cause of action for fraud arose upon public announcement of the particular contract award. It was then that plaintiff should reasonably have known that its bid, which plaintiff obviously considered “responsible,” was in fact lower than the winning bid and therefore was wrongfully rejected by defendant Roach. Plaintiff would then be under a duty to ascertain the reason why it had submitted the lowest responsible bid and yet had not received the contract. Therefore, plaintiff is precluded from recovering for any improper contract awards for which plaintiff was capable of receiving notice, prior to February 10, 1984, that its lower bid was rejected in favor of a higher bid.
IT IS BY THE COURT THEREFORE ORDERED that defendants’ motions for summary judgment or dismissal of plaintiff’s section 1983 claim be denied. IT IS FURTHER ORDERED that defendants be granted summary judgment as to any cause of action that is based on a fraudulent contract award for which announcement was made by the state prior to February 10,1984. IT IS FURTHER ORDERED that defendants’ motions for summary judgment or dismissal on plaintiff’s RICO and common law fraud claims be denied. Plaintiff is directed to file an amended complaint consistent with this Memorandum and Order within ten (10) days of the date of this order. Defendants are directed to file any desired renewal of or supplements to their dispositive motions on the RICO and common law fraud claims simultaneously with the filing of their answers to plaintiff’s amended complaint.